State paid $2.4 million for psychiatric hospital site in Berlin

Part of the site for the Green Mountain Psychiatric Care Center. Photo by Alicia Freese

The state paid $2.4 million for the 6.5 acre site for the new Green Mountain Psychiatric Care Center in Berlin.

The town of Berlin valued the Fisher Road properties, which are owned by members of the Lague family, at about $1 million in 2008 at the height of the pre-recession real estate market. The Lagues made $2.1 million total on 5.7 acres and two houses; the deal, which includes four parcels, was finalized in December. The purchase is included in the total cost of the $28 million Green Mountain Psychiatric Care Center.

The state also purchased two houses and 0.75 acres owned by Peter and Gaila Rossiter for about $300,000.

The 25-bed care center will be part of the replacement system for the Vermont State Hospital at the Waterbury State Office Complex, which was damaged in August 2011 by floodwaters from Tropical Storm Irene. Last year the Legislature and the Shumlin administration put a plan for a regionalized, 48-bed mental health care system in place. The Green Mountain Psychiatric Care Center in Berlin is the lynchpin of the new decentralized system. The 47,400 square foot project is on a fast-track construction schedule that will begin this year with an estimated completion date in 2014. Mental health experts and state officials are operating under some urgency as the state does not have enough treatment options for patients with severe psychiatric conditions.

State officials — lawmakers and members of the Shumlin administration — made it known when they drafted Act 79 (the enabling legislation for the new system) a year ago that they wanted a location adjacent to the Central Vermont Medical Center. The hospital also had a keen interest in the Lague properties, and held an option to purchase one of the Lague parcels.

These two factors put the state in a weak bargaining position, according to Jeff Lively, general counsel for the Department of Buildings and General Services. Lively responded to a a public records request for documents associated with the sale.

“You have to know much of this was publicly out there and having the mental health facility next to the hospital was all part of the legislative discussion,” Lively said. “It doesn’t put the state in best negotiating position. It’s really tough when the executive branch or the Legislature gets out in front.”

As part of the agreement, the Lagues must vacate the two houses immediately. That also put the properties at a premium, Lively said.

“The reality is, there are very, very few sites co-located next to a hospital,” he added.

Larry Cassidy, a special assistant to the Shumlin administration who handled the negotiations, did not respond to calls for comment. Cassidy, a personal friend of the governor’s and the proprietor of Bast Investment Co., a real estate investment firm, also helped the state obtain leases for office space after Irene.

Members of the Lague family — Henry Lague III and Henry Lague, Jr. — did not respond to requests for comment.

The average $368,000 per acre pricetag is not out of the ballpark for commercial property, according to Tim Heney, principal broker at Heney Realtors. He described the Lague properties as a superior location.

“It’s not out of line,” Heney said. Similar properties in the central Vermont area have recently sold for about $400,000 an acre, he said. “That’s a big piece of land in that kind of location with water, power and phone lines up on the hill. It’s developed and all those things are there.”

Gov. Peter Shumlin and members of his administration will dedicate the site at a ceremony at 1 p.m. on Tuesday.